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Debt Collectors Do Not Care About Your Divorce Decree. – Credit Law Center

A divorce decree is the final courts ruling or judgment in the termination of marriage. In this final judgment, the two parties will divide properties, determine spousal/child support and divide financial debt. Something that is brought up a lot in regards to credit reports and debt collections is, my spouse was supposed to pay that debt according to our divorce decree. Yes, your spouse may have been deemed responsible for paying this debt; however, the credit card companies or other financial institutions do not follow the divorce decree

Why do financial institutions not abide by the divorce decrees?

A financial institution only follows the legal binding contract you signed with their organization, so if you and your ex-spouse signed a joint account with their company, you would both be held responsible for the account. It is a good idea that you and your ex-spouse try and pay off any debt before filing for divorce.

It is important to remember that even if your spouse is deemed responsible for paying A, B and C debt in the divorce, and if they do not pay they will come after you and any missed payments will harm your credit and possibly cause the creditors to file judgments.

The debt you are unaware of.

Some states are community property states, and you could be held responsible for the debt that your spouse incurred, even if you are unaware of and did not sign a contract with. Community property states consider marital debt – joint debt.

Things to Consider.

Add an Indemnity clause to your divorce decree in cause you have to pay for his or her portion of the debt to protect your credit rating. The Indemnity clause will allow you to take him or her back to court to allow you to sue for reimbursement.

Make sure you are aware of all debt that is on both reports when filing for divorce if you live in a community property state.

Try and pay off as much debt as possible, before filing for divorce.

Make sure any house or car loans are refinanced in one name so that both names are not on them.

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